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  • Das
  • Ross, JJ.
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Smart Summary

Structured Summary of the Opinion (Das, J.)

Factual and Procedural Background

The plaintiffs (appellants) instituted suit to enforce a mortgage bond executed by Brahmdeo Prasad Singh on 24 July 1904 for Rs. 5,000. Of this sum, Rs. 3,039 related to two earlier hand-notes (one dated 1 January 1900 for Rs. 995 and one dated 4 March 1902 for Rs. 1,100); the remaining Rs. 1,961 was advanced at the time of the mortgage (24 July 1904). The plaintiffs alleged that Brahmdeo was the karta of a joint family and that the advances were raised for necessary purposes. The learned Subordinate Judge dismissed the suit, finding there was no legal necessity for any of the bonds covered by the mortgage. The plaintiffs appealed. On appeal the Court examined (a) whether legal necessity existed for each of the three indebtedness items; (b) whether the creditor's remedy in respect of the 1 January 1900 hand-note was barred by limitation as of the mortgage date; and (c) related questions about benefit to the family from a thika lease and partition/allocation issues, ultimately remanding certain issues to the Subordinate Judge for trial.

Legal Issues Presented

  1. Whether legal necessity was established for (a) the hand-note dated 1 January 1900 (Rs. 995), (b) the hand-note dated 4 March 1902 (Rs. 1,100), and (c) the advance made on 24 July 1904 (Rs. 1,961).
  2. Whether the creditor's remedy in respect of the 1 January 1900 debt was barred by the law of limitation on the date of the mortgage, and if so, whether the karta of a joint family can bind the family to pay a statute-barred debt.
  3. Whether failure to raise the statute-of-limitations defence specifically in the written statement precluded the respondents from arguing later that the karta had no power to bind the joint family to pay a statute-barred debt.
  4. Whether the advance of 24 July 1904 was a necessary debt incurred for the benefit of the joint family (specifically to enable the family to take a thika lease of property belonging to the Bettiah Raj), or whether it was a personal acquisition by Brahmdeo.
  5. Whether, after partition and allotment of some mortgaged properties to Brahmdeo, the plaintiffs could proceed against those allotted properties — i.e., whether a mortgage over unspecified property can operate as a contract that becomes an effective assignment once the properties are identified.

Arguments of the Parties

Appellants' (Plaintiffs') Arguments

  • The Subordinate Judge should have found that legal necessity existed at least for (i) the loan of 1 January 1900 and (ii) the advance of 24 July 1904.
  • The 24 July 1904 advance was necessary to enable the family to take a thika lease of property of the Bettiah Raj, and therefore benefited the joint family.
  • The plaintiffs had made enquiries (including sending a representative to Bettiah) to verify negotiations for a lease, supporting the existence of necessity for the 24 July 1904 advance.

Respondents' (Defendants') Arguments

  • As to the 1 January 1900 loan, the creditor's remedy was barred by the law of limitation on the date of execution of the mortgage (24 July 1904); therefore, whether there was legal necessity is irrelevant because the debt was statute-barred.
  • The karta of a joint family has no power to enter into any agreement binding the joint family to pay a statute-barred debt.
  • Regarding the 24 July 1904 advance, the thika lease relied on by plaintiffs was taken by Brahmdeo on his own behalf, not on behalf of the joint family; alternatively, there was no necessity and no benefit accrued to the family from the lease.
  • Challenged sufficiency of lenders' enquiries and evidence that would satisfy a prudent lender (relying on authority cited to require adequate enquiry by the lender).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Gopalnarain Mozoomdar v. Muddomutty Guptee Onus is on the plaintiff/mortgagee to prove the mortgage is valid; if evidence shows some debts were barred by limitation, the mortgagee must pay off subsisting charges — the defendants need not have specially pleaded the limitation point for it to be entertained on appeal. The court relied on this decision to hold that respondents could argue some items secured by the mortgage were statute-barred even though the point was not specifically taken in the written statement; therefore the onus remained on plaintiffs to prove validity of the mortgage.
Hunoomanpersaud Pandey v. Baboobee Munraj Kunwari Authority relied upon to argue that a lender must make sufficient enquiry to be satisfied that the karta acted as a prudent owner before lending on behalf of the joint family (standard of enquiry by lender). The court noted the respondent relied on this case to challenge sufficiency of evidence of lender's enquiry; the court then considered subsequent authority and concluded the extent of enquiry relied on by the plaintiffs was sufficient in the circumstances.
Manna Lall v. Karu Singh Judicial Committee decision supporting that evidence of enquiries and of family benefit from a thika lease can be sufficient to prove legal necessity where karta borrows to acquire a thika lease. The court treated Manna Lall as settling the point and applied it to hold that plaintiffs' enquiries and evidence were adequate to establish legal necessity for the Rs. 1,961 advance dated 24 July 1904, thereby entitling plaintiffs to the usual mortgage decree for that sum.
Collyer v. Issaacs Principle that a mortgage of property not then capable of identification, when made for valid consideration, may operate as a contract which, once the objects become identifiable, equity can treat as effecting an assignment. The court cited this authority in discussing the plaintiffs' argument (to be tried) that, after partition and allotment of certain mortgaged properties to Brahmdeo, the plaintiffs might be able to enforce the mortgage against those allotted properties; the court declined to decide and remanded the matter for trial.

Court's Reasoning and Analysis

The court proceeded issue by issue, applying fact findings and precedent stated in the record:

  1. 4 March 1902 hand-note (Rs. 1,100): The Court, after examining the evidence (as canvassed by counsel and the record), found that legal necessity had not been proved for this bond. The Court therefore did not disturb the Subordinate Judge's dismissal on this item.
  2. 1 January 1900 hand-note (Rs. 995): The Court expressed dissatisfaction with the Subordinate Judge's reasoning as to legal necessity for this loan, but considered a separate and decisive point raised by respondents — that the creditor's remedy was barred by the law of limitation as of the mortgage date (24 July 1904). The Court relied on the factual record that the promissory note dated 1 January 1900 and the mortgage dated 24 July 1904 showed no part payments. Applying the principle (drawn from Gopalnarain Mozoomdar v. Muddomutty Guptee) that the onus lay on the plaintiff to prove the mortgage's validity, the Court held respondents could argue that certain items were statute-barred even if not specifically pleaded. Concluding the remedy in respect of the 1 January 1900 debt was extinguished by limitation as of 24 July 1904, and noting the established rule that the manager (karta) of a joint Hindu family has no power to bind the family to pay a statute-barred debt, the Court affirmed the Subordinate Judge's decision on this point.
  3. 24 July 1904 advance (Rs. 1,961): The Court examined competing contentions: plaintiffs said the advance was necessary to secure a thika lease for the family; defendants said the lease was a personal acquisition by Brahmdeo, or that no family benefit or necessity existed. The Subordinate Judge had relied on an ekrarnama (Exhibit N) to find the thika lease was a personal acquisition, but on review the appellate Court discussed evidence and found the property to be joint family property. The Court then considered the sufficiency of enquiries made by the plaintiffs and the applicable legal standard for proving necessity. While respondents relied on Hunoomanpersaud for a stringent standard of enquiry by lenders, the Court regarded the issue as settled by the Judicial Committee's decision in Manna Lall v. Karu Singh, which upheld a decree where enquiries and evidence showed that the loan was for acquiring a thika lease and that co-members benefited. The Court concluded that the plaintiffs had made enquiries (including sending a representative to Bettiah) and that the evidence sufficed to establish legal necessity for the Rs. 1,961 advance. Accordingly, the plaintiffs were entitled to the usual mortgage decree for that amount enabling them to raise it out of the mortgaged properties.
  4. Remaining issues (partition/allocation and related questions): The Court identified three further questions (some specified in issues and pleadings, one arising from facts not pleaded) including whether partition had occurred and whether some mortgaged properties had been allotted to Brahmdeo, and whether a mortgage over unspecified property could operate as a contract and later become an effective assignment once properties were identified. Because these matters had not been dealt with by the Subordinate Judge and depended on facts not fully before the appellate Court, the matter was remanded to the Subordinate Judge to try those issues, with liberty to the parties to adduce further evidence.
  5. Procedural-point analysis: On whether respondents were precluded from raising the statute-bar defence because it was not expressly pleaded, the Court held (following the Gopalnarain authority) that the defence could be argued in the appellate court because the onus was on the plaintiffs to prove a valid mortgage and evidence might show some debts to be barred.

The Court's factual findings support (a) that the 1 January 1900 debt was barred by limitation on 24 July 1904, and (b) that the 24 July 1904 advance was shown to be necessary for family purposes and therefore enforceable as a mortgage claim for Rs. 1,961. The Court remanded unresolved factual and legal issues to the Subordinate Judge for trial and directed a prompt return of findings.

Holding and Implications

Holding: The Court (i) affirmed the Subordinate Judge's conclusion that the 1 January 1900 debt was statute-barred and therefore not enforceable against the joint family; (ii) held that legal necessity was not proved for the 4 March 1902 hand-note; and (iii) found that legal necessity was established for the advance of 24 July 1904 and granted the plaintiffs the usual mortgage decree for Rs. 1,961.

Implications and consequences:

  • The plaintiffs cannot enforce the mortgage in respect of the items which were found to be statute-barred (1 January 1900) or for which legal necessity was not proved (4 March 1902).
  • The plaintiffs are entitled to enforce the mortgage in respect of the Rs. 1,961 advanced on 24 July 1904; they may raise that sum out of the mortgaged properties by the usual mortgage decree.
  • The case is remanded to the Subordinate Judge to try the remaining issues (including partition/allotment questions and whether mortgaged properties now allotted to Brahmdeo are subject to the mortgage), with leave to adduce further evidence; findings are to be returned within two months of receipt of the record. Costs were reserved.
  • The Court applied existing authorities to resolve the issues raised; it did not purport to establish any new legal principle beyond applying the cited precedents to the facts before it.

Disposition: Case remanded for trial of specified issues; partial decree for Rs. 1,961 in favour of plaintiffs; other claims dismissed as indicated. Costs reserved. (Ross, J. concurred.)

Show full summary ...

    Sadhu Saran Prasad Singh v. Brahmdeo Prasad Singh

    Das, J.:— This was a suit instituted by the appellants against the respondents to enforce a mortgage bond executed by one Brahmdeo Prasad Singh on the 24th July, 1904, the bond was for Rs. 5,000 of which Rs. 3,039 was found due to fane plaintiffs on two previous hand-notes, one dated the 1st January, 1900, for Rs. 995 and the other dated the 4th March, 1902, for Rs. 1,100; the balance, that is, Rs. 1,961 was advanced at sue time of the execution of the bond. The plaintiffs allege that Brahmdeo Prasad Singh was the karta of a joint family and was entitled to and did in fact raise the money covered by the mortgage for necessary purposes.

    2. The learned Subordinate Judge on a consideration of all the evidence in the case has come to the conclusion that there was no legal necessity in respect of any of the bonds covered by the mortgage and has accordingly dismissed the suit. In this Court it was argued on behalf of the appellant by Mr. Manuk that the learned Subordinate Judge should have held that at least as regards the loan covered by the hand-note of the 1st January, 1900 and as regards the advance made on the 24th July, 1904, there was legal necessity. Mr. Manuk conceded that he has not been able to establish legal necessity in respect of the advance covered by the band-note of the 4th March, 1902. His learned junior, however argued before us that as a matter of fact there is evidence to show that there was legal necessity in respect of the hand-note of the 4th March, 1902, and as the question is a short one it will be convenient if I deal with this point first. (His Lordship examined the evidence and bound that legal necessity as regards this bond was not proved) I now come to the question of the first hand note, that is to say, the hand-note executed on the 1st January, 1900, for Rs. 995. I am not satisfied with the reasonings given by the learned Subordinate Judge for holding that legal necessity has not been established in respect of this loan, but Mr. Das on behalf of the respondents contends that the question whether there was any legal necessity in respect of this particular loan is wholly irrelevant in view of the fact that the creditor's remedy in respect of this loan was clearly barred by statute on the date of the execution of the mortgage. To this Mr. Manuk replied that he had no notice of this defence and that if the point had been raised in the written statement it might have been possible for him to produce evidence that there was acknowledgment of the debt by the joist family sufficient to take the case out of the statute. It is quite true that the point was not specifically taken in the written statement but it was alleged in the written statement that the mortgage was not a valid document and was not binding on the joint family. The question which we have to determine is whether the failure to take the point specifically in the written statement debars the respondents from arguing that the karta of a joint family has no power whatever to enter into any agreement binding himself on behalf of the joint family to pay a statute-barred debt.

    3. The identical question was debated in a case before the Calcutta High Court so far back as the year 1873. The case to which I am referring is the case of Gopalnarain Mozoomdar v. Muddomutty Guptee(1). The suit in that case was a suit by the mortgagee to enforoe the mortgage executed by one Gourinarain on his behalf and on behalf of the joint family of which he was the karta. He purported to execute the mortgage not as karta of the joint family but as the executor appointed by the last Will and Testament of his father Hurrynarain Mozoomdar. It is unnecessary to deal with that point because the High Court held that as a matter of fact he was the karta of the joint family and that the case could be disposed of on that basis. The point raised in the appeal was whether Gourinarain executed a mortgage for Rs. 6,847-3-3 in order to secure advances from time to time made to him by the mortgagee, and it was found at the appellate stage that at the time of the execution of the mortgage only one debt of Rs. 100 was not then barred by the law of limitation and it was also found that in the peculiar circumstances of the case the mortgage in respect of another item, namely, Rs. 947-3-3 was a good mortgage. The point that Gourinarain as the karta of a joint family had no power whatever to enter into a contract on behalf of the joint family to pay a statute-barred debt was not raised in the Court of first instance and was not decided. The point, however, was specifically raised in the Court of appeal, and it was objected on behalf of the mortgagee that it was not open to the mortgagors to take the point as they had not raised it by their pleadings and had not asked the Court of first instance to adjudicate on the point. With reference to this point Sir Richard Couch said as follows:—

    “Having disposed of these minor objections, we come to consider whether any of the debts intended to be secured by the mortgage were at that time barred by the law of limitation. This objection arises on the plaintiff's case; it is not an objection which the defendants had to take in their written statements, or by way of defence to the suit. The onus was on the plaintiffs to prove that the mortgage was a valid one and if it appeared upon evidence that some of the debts were barred, the case would not come within the requirement that the mortgagee should be made to pay off a subsisting charge upon estate.”

    4. In my view therefore the onus being upon the plaintiffs to establish that the mortgage was a valid mortgage it is open to the respondents to argue in this Court that as regards some of the items at least the mortgage was not a valid mortgage.

    5. The next question is whether as a matter of fact the debt was barred by limitation on the date of the execution of the mortgage. As to this there can be no doubt that the promissory note was executed on the 1st January, 1900, and the mortgage was executed on the 24th July, 1904, and mortgage document itself discloses the fact that there were no part payments made on behalf of the mortgagors.

    6. The remedy in respect of this debt was extinguished on the 24th July, 1904, and it is clear on the authorities that the manager of a joint Hindu family has no power what ever to enter into any agreement be pay a statute-barred debt and the decision of the learned Subordinate Judge therefore on this point must be affirmed.

    7. I now come to the last point that arises in this appeal, namely, the question of the legal necessity in connection with the advances made on the 24th July, 1904. The plaintiff's case is that this advance was necessary to enable the family be bake a thika lease of a certain property belonging to the Bettiah Raj. The defendant's case is that the thika lease referred to by the plaintiffs was a lease taken by Brahmdeo on his own behalf and not on behalf of the joint family; their alternative case is that there was no necessity to take this lease and that in any event no benefit has accrued to the family from this lease.

    8. The learned Subordinate Judge, relying mainly on the ekrarnama, Exhibit N, has come to the conclusion that this thika least was Brahmdeo's personal acquisition and not an acquisition on behalf of the joint family. (The judgment then discussed evidence and found that the property was joint family property). The next question is, was there any necessity to borrow money to acquire this property 5 Mr. Das' argument is that there is no evidence sufficient to satisfy this Court that there was an enquiry made by the lender that in this particular instance Brahmdeo acted as a prudent owner. He relied on the well known case of Hunoomanpersaud Pandey v. Baboobee Munraj Kunwari(2). The point in my view has been settled by the decision of the Judicial Committee in the case of Manna Lall v. Karu Singh(3). That was a case where the karta of a joint family borrowed money in order to acquire a thika lease and the only evidence that had been adduced in the case was as follows:—

    ‘The money was taken in cash by the defendant No. 1. The money was taken for the purpose of paying zarpesngi in respect of a thika taken by the defendant No. 1 for himself and the defendants 2 and a who were equally benefited.’

    9. And another witness stated as follows:—

    “Defendant No. 1 also borrowed Rs. 1,000 for payment of zarpeshgi in respect of a thika taken by him and for other purposes. I made enquiries and learnt that zarpeshgi was required to be paid. The defendants 2 and 3, were benefited by the loan the thika property was possessed by the defendants 1 to 3.”

    10. On this evidence the learned Subordinate Judge dealing with the case gave a decree to the mortgagee. The Calcutta High Court set aside that judgment and the case went up be the Judicial Committee and the Judicial Committee restored the decision of the learned Subordinate Judge.

    11. Mr. Das, however, argued that as the case was decided ex parte the Court acted on evidence which clearly would be insufficient had the case been a contested one: and he relied on the following passage in the judgment of the Judicial Committee:—

    “Upon the plaintiff lay the burden of proving necessity in such case. He called evidence and produced documents, not all I that could have been called or produced, but enough to satisfy the Subordinate Judge; and there is material on the record to show that he had armed himself with further proof of witnesses who might be in attendance it is were required.”

    12. I cannot for a moment admit that the Judicial Committee would have given a decree be the plaintiffs it the evidence was not sufficient to establish the case of the plaintiffs. The evidence in this case establishes that the plaintiffs made enquiry into the alleged necessity and that one of them went be Bettiah and ascertained the fact that the Battiah Raj had entered into negotiations for a lease in favour of Brahmdeo. Mr. Das, however, argues that an honest enquiry means an enquiry into the terms of the lease itself which would satisfy the lender that the lease would be beneficial be the family. I know of no case whatever that has gone be this extent and in my view the plaintiffs have established that there was legal necessity in respect of the sum of money advanced on the 24th July, 1904. The plaintiffs would accordingly be entitled be the usual mortgage decree for Rs. 1,961 enabling them be raise this money out of the mortgaged properties.

    13. Three other questions have been argued before us bub, as they have not been dealt with by the learned Subordinate Judge, we think it right that the learned Subordinate Judge should try these questions before we finally dispose of the appeal. The first question is raised specifically in issues 13 and 14, and the second in paras. 9 and 10 of the written statement of defendants Nos. 12 and 13. The third question has not been raised either in the pleadings or in the issues, but clearly arises. It is this there has been a partition of the joint family properties belonging to the defendants and some of the properties mortgaged have been allotted be Brahmdeo Prosad Singh. The plaintiffs urge that though they may be unable be enforce the mortgage against the family as regards the two items as to which they have not been able be establish legal necessity, there is no reason why they should not be allowed be proceed as against the properties mortgaged which, under the partition, have been allotted be Brahmdeo. Their argument is that a mortgage of property which is not capable of specification, though it cannot operate as a mortgage, may, when made for valid consideration, be valid as a contract; and when the objects be which it refers come into existence and are capable of being identified, “equity baking as done that which ought be done fastens upon the property, and the contract be assign them becomes a complete assignment”, [Collyer v. Issaacs(4). We express no opinion at present on the question whether the argument is entitled to succeed but, as the argument depends on facts which are not before us in a convenient form, we think it right that the learned Subordinate Judge should deal with the argument, giving the parties the liberty to adduce, if necessary, further evidence.

    14. We accordingly remand the case to the learned Subordinate Judge for trial of the issues which we have set out in this judgment. He must return his findings within two months from the time he receives the record which must be sent down forthwith. Costs reserved.

    15. Ross, J.:— I agree.

    16. Case Remanded.

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    Comments

    Sadhu Saran Prasad Singh v. Brahmdeo Prasad Singh
    (Mar 12, 1921)